Recession 2014? Economy Drops 3% since April
The Obama administration continues to paint a rosy picture of the US economy, claiming that we are well on the way to recovery. Yet that’s not what the Gross Domestic Product (GDP) says.
Since the government reported in April that the economy is doing better, the GDP has fallen by 2.9%. That may not sound like a lot to some of you until you realize that it’s the largest drop in over 5 years. The last time the economy took a dive that large was during the recent recession, which I’m still not convinced is over.
But don’t worry, say the experts and government, the drop is due to an unusually cold winter, which by the way was a huge problem for global warming advocates. Yet, we’ve had other unusually cold winters in the past that did little to cause any significant drop in the GDP.
Now that summer is here and in our area we are running well above average for temperatures, some economists are trying to dispel the GDP drop by saying the worst is over and the economy is looking brighter.
Ethan Harris, Co-head of the Global Economics Research at Bank of America Merrill Lynch is optimistic about the economic future. He says that the budget deficit has improved over the past few years due to a tightening in the fiscal policies of the federal government. Harris stated:
“It is not that there is something great happening in the economy, but rather we are getting rid of this massive fiscal headwind. And that’s the No. 1 reason for stronger growth.”
I don’t understand how, since the deficit keeps growing and Congress keeps having to raise the debt ceiling to accommodate it. Current fiscal policies are still spend, spend and spend some more, so how is that helping?
Additionally, we are hearing about the drought in the west and southwest that is drastically affecting farming and ranching. Farmers in California’s rich San Joaquin valley don’t have enough water to irrigate their fields and many crops are hurting this year. In Texas and Oklahoma, ranchers haven’t had enough rain to grow the feed needed for their cattle. Consequently, beef prices are going up due to a shortage of beef and we can expect the same for many US grown crops.
The GDP is also dependent upon manufacturing and jobs and they really aren’t improving either. The government reports lower unemployment figures, yet there haven’t been enough jobs created to account for the drop. In most instances, Americans have exhausted their unemployment benefits and, causing them to fall off of the unemployment statistics. Many other Americans have given up looking for work and they too have fallen off of the official unemployment figures. While Obama is bragging about an unemployment rate of around 7.8%, the real unemployment figure is closer to 18%-22%.
My wife was laid off a month and a half ago and she is having trouble finding jobs to apply for in order to get her unemployment. She’s only required to apply for two jobs a week, but those two jobs have been very difficult to find.
Here’s another aspect that will drastically affect our nation’s economy. Our infrastructure is getting old and no one has the money to maintain, repair or replace it. I’m talking about highways, bridges, etc. I live in northern Kentucky, just south of Cincinnati. Several miles from my house, Interstates 71 and 75 merge heading north. Just after you cross the Brent Spence Bridge, they split up again. These two interstates are among the major commercial transports routes from the north central to south central parts of the country. The Brent Spence Bridge is getting old and dangerous and needs replacing. The cost is in the billions. Both Kentucky and Ohio have been trying to obtain federal funding for a new bridge, but that hasn’t panned out. Both states are now talking about paying for it with tolls, which means that everyone that has to travel over the bridge on a daily basis for their jobs will have to pay more just to go to work and home. All of the commercial truckers that converge in the area will pay tolls which will drive prices up.
What’s happening here is happening all over the nation. States are struggling with their own deficit budgets, let alone trying to come up with billions of dollars for bridges and roads. This all plays into the GDP and I don’t see anything that makes me optimistic about the future. Looking at many of Obama’s policies, including allowing millions of illegals to steal jobs from Americans, I would not be surprised to see the country plunge into another recession. Only this time, the recession may be severe enough to drive us into another depression like the one that happened 84 years ago.
Another Great Depression would be just what Obama needs to invoke martial law and complete his socialistic takeover of America. If you’ve been paying close attention to all of the executive orders and policies that Obama has put in place over the past 5 years, it’s an easy reality to see this happen within the next 2 years, before the 2016 election, which may never happen.